Robert cosigns a note for his friend Amelia,which she has given to Credit Union to secure a loan.Suppose the note was originally for $5,000 and payable in 12 months with interest at 10 percent a year.Credit Union and Amelia later agree that Amelia will have 24 months to repay the note but that the interest will be 13 percent per year.Robert is not aware of this change of terms.In the event of Amelia defaulting on the loan,will Robert have to repay the debt?
A)Robert will have to pay the debt because he is the surety.
B)Robert will not have to pay the debt because he has not received any compensation from Amelia for being a surety.
C)Robert will have to pay the debt because he is the guarantor.
D)Robert will not have to pay the debt because he has not accepted the changed terms of the loan.

Question

Quizplus · Accepted Answer

A surety contracts to be responsible for the performance of the principal's obligation.If the principal and the creditor change that obligation by agreement,the surety is relieved of responsibility unless the surety agrees to the change.

Robert Cosigns a Note for His Friend Amelia,which She Has